Insurance regulator Irda today came out with guidelines for persistency ratio under which it would be mandatory for corporate agents to retain 50% of their clients.
The guidelines would be effective from July 1, 2014.
Extending the guidelines, already in place for individual agents, to the corporate agents, Irda said the norms are applicable for those who solicit life insurance business.
"The stipulated persistency rate requirements will be effective for all corporate agency renewals that are due from July 1, 2014," the Insurance Regulatory and Development Authority (Irda) said in a circular.
For computing the persistency ratio, the policies which continue to provide insurance cover to clients after the end of premium payment (auto cover policies) can be included.
However, the policies which have already matured, or wherein death or surrender has happened, would be exempted from calculating persistency ratio for the agent.
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Further, employees of both life and general insurance companies cannot engage their relatives as corporate agents.
The term relative in this case is defined as spouse, sisters, brothers, parents, sons, daughters-in-law, daughters and sons-in-law, besides spouse, dependent children or dependent step children whether residing with the employee or not.